Meet the man who is largely credited with bringing in the township concept in the real estate sector around the Delhi-NCR region. Even at a time when real estate sector was booming, developing an integrated township was a tough task for NCR real estate builders. Mr Himanshu Love with tonnes of experience in this sector floated the idea of a well-planned township in the NCR and convinced the players that an integrated planning is needed to take this sector to newer heights in the NCR. In a free-wheeling interview to News MSME Editor Anup Kumar Sinha, Mr Love explained how real estate sector needs to develop certain standards and procedures to operate in a better, informed and efficient manner. Excerpts:
The Government has enacted the Real Estate (Regulation and Development) Act, 2016 recently. Some real estate companies have voiced the opinion that this act will hurt the business sentiments. What are your views?
The most important provision of this Act is that now builders will not be able to divert funds from a project. They will have to spend 70 percent of finance raised in the name of a certain project to the same project. True, it will reduce the numbers of projects in the market. It will also restrict the large real estate companies. But this will ensure that projects are delivered in a timely manner and will overall improve the efficiency.
This will benefit the buyers.
Certainly buyers will get the benefit. There will be no escalation of prices from real estate companies. This will bring in transparency in the market and at the same time it will check the unethical practices by some large companies..
Overall this will help the mid-size real estate companies who were dealing with one project at a time.
Definitely. They will get the benefit. But this act should also have brought in the purview some other unethical practices by builders. For example, real estate companies raise finance three times from three different players for one piece of land. Builders buy land from development authorities by depositing only a portion of the total price. Then they take loans from banks on the basis of the land allotted the remaining money to development authorities. At the same time they approach banks for project loans on the basis of the same plot. Buyers also take loans for the piece of same land. Thus one project gets financed much more than its value by different banks. If a project fails then this becomes really hard for banks and individuals to recover the money. The Real Estate Act should also have looked into such practices.
You have pointed out a great anomaly. Is it because the business ecosystem has many information gaps? Can this be bridged through the use of new technologies?
Technology definitely has a role when the players are aware about it. In the real estate sector, especially in marketing segment, majority have no knowledge about the real practices of the real estate sector. They do not get their basics right. This ill-informed untrained pool has vitiated the business environment in the sector. Providing right training to such people is the need of the hour.
You mean sales and marketing needs to be more trained and knowledgeable…
I believe that there should be a certain kind of license or standards mandatory for real estate brokers and agents. In other countries like Canada, the US and the UK there are well laid down qualifications and licensing system for becoming real estate service providers. In India, most of the real estate brokers cannot even check ownership papers of a property.
Should such training be provided by industry professionals…
The training institutions should be well regulated and Government must ensure that quality training is imparted by institutions.
There is a Sector Skill Council for Construction sector under Skill India framework…
Construction business attracts qualified engineers and architects who get their formal education before joining the profession. They just need to be sensitized about the industry best practices. But the sales and marketing segment is largely formed of untrained people who do have basic knowledge of this sector.
Should big corporate in real estate sector take such initiatives ?
Definitely. This will result in a well informed industry environment to the benefit of both buyers and sellers.